Budgeting changes give KU autonomy

Universities, colleges will apply legislative funding increases as they see fit

Just moments after lawmakers put the final touches on the higher education budget for the fiscal year that started July 1, work started on the next fiscal year's budget.

Feeding money to Kansas University and all other institutions of higher education is a never-ending process in Lawrence and Topeka.

"This has been a work-in-progress from day to day," Marlin Rein, KU's director of budget and governmental relations, said.

Just weeks after the Kansas Legislature adjourned in May, the Kansas Board of Regents recommended an 11 percent overall increase in higher education funding for the fiscal year that starts July 1, 2002.

Barring an unprecedented windfall in state revenue, it's unlikely that higher education will receive such an increase.

Dwindling state revenues have produced lean budgets in the past two years, producing single-digit growth in funding for higher education.

For example, during the current fiscal year, KU will receive $138.7 million in state general tax funds, a $5.4 million increase from the previous year, or about a 4 percent hike.

From the regents' proposal, the budgeting process goes to Gov. Bill Graves' office.

In January, Graves will propose an overall state budget, which will include funding levels for higher education.

Following the money

After Graves presents his recommendation, the House and Senate budget committees will hold public hearings and then start working on their own versions of the spending plan. The committees often divvy up the budget between subcommittees.

Later during the legislative session, the full committees will adopt budgets and send them to their respective chambers.

Once plans are approved by the House and Senate, a conference committee of budget leaders hammers out the differences between the two plans. The budget is usually wrapped up in the final moments of the session, and then the process starts again for the next year.

During this past session, most higher education officials say that the schools did pretty well considering the tight state revenue picture.

Late in the session, a $205 million budget hole developed because of dwindling state revenues and increasing social service caseloads.

Despite the problems, higher education officials protected an average 6.2 percent salary increase for faculty, and managed to restore some cuts that had been proposed earlier in the session.

Public higher education institutions receive about $800 million in state tax funds, the second largest recipient of funds behind the budget for kindergarten through 12th-grade education.

KU with about 26,000 students and a medical center is the largest university in Kansas, and receives and spends the most money.

The school is more than a million-dollar-a-day operation. KU's state-funded expenditures for the last fiscal year were $408.7 million.

Most of that money comes from state general tax funds, tuition, gifts and grants. The largest expense more than half is for salaries. KU has nearly 1,900 employees.

According to regents statistics, KU spends about 80 cents for every dollar spent by one of its peer institutions.

For comparison purposes, KU uses as its peers, the universities of North Carolina, Iowa, Colorado, Oregon and Oklahoma.

Kansas State, the next largest university in Kansas, spends about 82 percent for every dollar spent by one of its peer institutions, which are the land grant universities in North Carolina, Iowa, Colorado, Oregon and Oklahoma.

A new procedure

Although the budgeting process is continuous, there will be a new wrinkle this year.

For the first time, KU and the other schools will submit "block grant" budget proposals. Instead of detailed budget requests that show recommended levels of funding for each item, the schools will request a flat-percentage rate increase. They then will apply that increase as they see fit.

"It's going to be an exciting year," Rein said. The plan is designed to give the individual schools more autonomy in deciding how to spend state funds.

This method of budgeting has been endorsed by Graves and the regents. But some lawmakers have shown some misgivings, and have urged a go-slow approach.

The "block grant" funding method will be studied this year by the Legislative Budget Committee.

"Everybody is anxious to see how this will play out," Rein said. "I think it will be to the advantage of everybody. But there are some details that need to be worked out."